"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


Thursday, December 12, 2013

GLD continues dishoarding gold; Western investment demand remains weak

One look at the following chart pretty much tells the tale of gold demand in the West. It continues to sink and as it does, so does the gold price.

Today's slide in price is disconcerting as it has erased all of the gains it put in earlier this week. Friday is going to therefore be a big test for the yellow metal. Will buyers show up and keep the market supported above $1210 or do we go back down to revisit those lows once again?

With "The Hobbit, the Desolation of Smaug" due out tomorrow, let's hope it is not a case of the Desolation of Gold. Fridays have not normally been fun days for the gold bulls.


  1. Hey Dan,

    Seems like the tug of war continues between the bears and the bulls here - I honestly thought the bulls had something going for them earlier in the week, at least on a short-term basis, but even that rally proved to be more short-term then I thought it would be.

    Seems like we are going to test the "12" handle soon. I wouldn't be surprised if we lose it at this point, given the price action over the past few weeks. Like you've said many times over, rallies are being sold off. Seems like buyers are showing no conviction in holding positions until they see lower prices.

    Would you be open to writing up a brief post on how you got started in trading in general? As a younger trader myself, I'm really interested in the background that got you to where you are today. Additionally, any insights you have on trading leveraged instruments would be appreciated. I know you trade futures, but if you have any knowledge to share on trading options in GLD/SLV, as I see others who comment referencing their own experience in options and buying puts.

    If you don't have time in your schedule with the holidays coming up to post about that right now I understand - just thought I'd ask! Thanks again for sharing your knowledge - I think people should respect the fact that you're putting your perspective out there and backing it up, even if they may disagree.

    All the best!

    1. Syncubate;

      My journey as a trader would take a book to tell. I have given some thought to this in all seriousness because I have had sufficient requests that I am considering it. My only problem is the time factor that makes it difficult right now to put something like that out.

      I would basically be teaching lessons on trading in general that I have learned in my quarter century of playing in the pits. I have some fun stories to tell, especially my days of trading pork bellies.

      Thanks for the kind words....

      they are most sincerely appreciated.

  2. Thu Market: One small ray of Hope for Gold.

    GDX and GDXJ did NOT drop the same percentage as GLD.
    Full Disclosure: last Fri I started nibbling a little with BGEIX and FSAGX (401K acct); yesterday ( Thu) I picked up a few shares of IAG ( Niobec,the hidden gem), KGC, HL, FSM and PLG. Will buy little more every 7% drop.
    ( Gold could drop as low as 1050 by Jan; hence average very slowly). Also Coal: ACI ( Nat Gas is now solidly above $4.10)

  3. Wolfwisdom

    I bought Nat Gas when it was around $2 due it was approaching price of production. At the time most of the analysts were telling everyone that low price was here to stay and would probably only drift lower…sounds familiar doesn't it ?
    Gold holding up so far today.

  4. GDX/GLD ratio now pummeled to record lows. GLD attempting to rally but the miners are not buying it at all.

    7 standard deviations and counting

    1. Mark

      Gld up .77%
      GDX up 1.09%

      Miners not buying it?
      Could change by the end of the day..but still..

  5. The peak load of GLD holding is barely enough for one year of China gold import, come to think of it.

  6. Dan:
    Thanks for pointing this out and for all you do.
    The up slope and the down slope nearly match. Besides feeling sorry for the GLD managers whose income and bonus must be impacted and correlating this with the recent attention paid to gold on CNBC it seems as if we may be near the end of this phase in the cycle (CNBC was all over gold at the peak too).

    Thanks for pointing out the size relative to China's public purchases. I have seen lots of Gold Bugs blame GLD sellers for sending gold to China. Looks like they must be getting most of it elsewhere,

    I still expect / fear a test of the recent low in a blowout bottom and hope I have the courage to increase my underwater holdings near the bottom even though it will make my PM holding a larger percentage of my portfolio than I like it to be.

  7. DBC still getting crushed as vicious selling now hitting the crude oil market.

    I'm willing to bet that Yellen is going to be watching both bonds and the CRB Index tanking, and if stocks also start into a deep correction, she is going to panic and DOUBLE quant easing in 2014.

    Of course, that will be good enough to push crude back up to $110, gold back up to $1,650, and the Dow up to 20,000 before she decides to put on the brakes.

    REITs and other interest rate sensitive items could have a vicious bear market rally with bonds if this happens, so I would start adding to IYR right now.

  8. Get detailed information about gold as an investment including Price, Charts, Technical Analysis, Historical data, Reports and more.


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